Receiving Payments in the U.S.
Taxable income is often taxed before you receive it, i.e., you will receive a check net of taxes. At the end of the calendar year you have to then submit a tax return to the federal government and the state in which you reside to true up your income and taxes paid. If you were taxed exactly right, you will submit your tax return and nothing further will happen. Many people, especially Non-Resident Aliens for Tax Purposes are taxed at a higher rate initially so that they will receive a refund when they submit their U.S. Federal Income Tax Return. In some occasions, people end up owing money to the IRS and the State they reside in.
On the following pages, we discuss different kinds of payments made to you and what the tax implications are.
Just as a quick primer for the three situations most common:
1) if you work, you will get taxed on federal and state taxes as well as social security and medicare taxes
2) if you receive financial aid that is greater than the cost of tuition, you will get taxed on federal taxes and state taxes
3) if you receive an honorarium, you will get taxed on federal and state taxes
There is only one way to get out of taxation - when your country has a treaty agreement with the U.S. You can find information on the countries and types of income here.
In February of each year, tax forms are sent out for the previous year by the companies / organizations who paid you money. It is your responsibility to do your tax return with the help of those tax forms by April 15 of that year. Even if you did not earn any money but are here on a F, J, M, or Q visa and are a non-resident alien, you still need to fill out a form 8843.
The Tax Office is required by law to collect visa, passport, address etc. information in order to determine your tax residency. We usually collect this information over a secure website called FNIS (Foreign National Information System) and communicate with you in regards to this website via email. Once we determined your tax status, we need to collect a Form that summarizes the data you submitted and several tax forms like a W-8BEN, W-4, possibly a Form 8233 or W-9. It is very important that you give us the information and forms in a timely manner when we contact you. All international employees, visitors, undergraduate and graduate students are required to fill out FNIS no matter whether they receive payments or not.
Last Updated: April 27, 2009